Jazz Pharmaceuticals Announces Full Year And Fourth Quarter 2015 Financial Results
"In 2015, we delivered solid growth on the top- and bottom-line while increasing investment in new growth opportunities for our current products and our promising R&D pipeline," said
Adjusted net income attributable to
GAAP net income attributable to
2015 Revenues and Product Sales
Total revenues for the year ended
Net product sales for 2015 and the fourth quarter of 2015 were as follows:
- Xyrem: 2015 Xyrem net sales increased by 23% to
$955.2 million compared to$778.6 million during the prior year. Xyrem net sales increased by 13% to$251.8 million in the fourth quarter of 2015 compared to$222.5 million in the fourth quarter of 2014. - Erwinaze®/Erwinase® (asparaginase Erwinia chrysanthemi): 2015 Erwinaze/Erwinase net sales were
$203.3 million compared to$199.7 million during the prior year. Erwinaze/Erwinase net sales were$50.4 million in the fourth quarter of 2015 compared to$52.8 million in the fourth quarter of 2014. Product sales volume for the full year and fourth quarter of 2015 increased compared to the same periods in 2014; however, net sales were negatively impacted by higher chargebacks and rebates and unfavorable foreign currency exchange rates. In the fourth quarter of 2015, the company experienced supply challenges that disrupted the ability to fully supply certain markets. - Defitelio® (defibrotide): 2015 Defitelio/defibrotide net sales were
$70.7 million compared to 2014 full year pro forma Defitelio/defibrotide net sales of$73.4 million . Defitelio/defibrotide net sales from the period beginning from the closing of its acquisition of Gentium S.r.l. onJanuary 23, 2014 toDecember 31, 2014 were$70.5 million . Defitelio/defibrotide net sales were$18.5 million in the fourth quarter of 2015 compared to$19.2 million in the fourth quarter of 2014. Product sales volume for the full year and fourth quarter of 2015 was consistent with the company's expectations and higher than the same periods in 2014, but net sales were impacted by unfavorable foreign currency exchange rates. - Prialt® (ziconotide) intrathecal infusion: Prialt net sales were
$26.4 million in both 2015 and 2014. Prialt net sales were$6.5 million in the fourth quarter of 2015 compared to$10.0 million in the fourth quarter of 2014. Net sales in the fourth quarter of 2014 included shipments toEisai Co. , the European distributor of Prialt. - Psychiatry products: 2015 net sales of the company's psychiatry products were
$37.1 million compared to$40.9 million in the prior year. Net sales of the company's psychiatry products were$8.8 million in the fourth quarter of 2015 compared to$8.4 million in the fourth quarter of 2014. - Other: 2015 net sales of other products were
$24.1 million compared to 2014 full year pro forma net sales of other products of$47.0 million . Net sales of other products in the fourth quarter of 2015 were$3.0 million compared to$11.3 million in the fourth quarter of 2014. InMarch 2015 , the company completed the sale of certain products and the related business that the company acquired as part of the acquisition ofEUSA Pharma Inc. in 2012.
Tables showing actual net product sales for the three months and year ended
Operating Expenses and Other
Operating expenses for 2015 were
- Cost of product sales for 2015 was
$102.5 million compared to$117.4 million for 2014. Cost of product sales for the fourth quarter of 2015 was$24.0 million compared to$28.8 million for the same period in 2014. Gross margin for 2015 was 92.2% compared to 89.9% for 2014. Gross margin for the fourth quarter of 2015 was 92.9% compared to 91.1% for the same period in 2014. - Selling, general and administrative (SG&A) expenses for 2015 on a GAAP basis were
$449.1 million compared to$406.1 million for 2014. SG&A expenses for the fourth quarter of 2015 on a GAAP basis were$125.6 million compared to$105.7 million for the same period in 2014. Adjusted SG&A expenses for 2015 were$355.4 million , or 27% of total revenues, compared to$321.5 million , or 27% of total revenues, for 2014. Adjusted SG&A expenses for the fourth quarter of 2015 were$87.4 million , or 26% of total revenues, compared to$83.5 million , or 25% of total revenues, for the same period in 2014. The increases were primarily due to higher headcount and other expenses resulting from the expansion of the company's business, except that the increase in GAAP SG&A expenses for the fourth quarter of 2015 compared to the same period in 2014 was primarily due to a one-time charge for settlement of a contract claim originally asserted againstAzur Pharma Public Limited Company (Azur Pharma) prior to the 2012 merger betweenAzur Pharma andJazz Pharmaceuticals , Inc. - Research and development (R&D) expenses for 2015 on a GAAP basis were
$135.3 million compared to$85.2 million for 2014. R&D expenses for the fourth quarter of 2015 on a GAAP basis were$29.5 million compared to$24.6 million for the same period in 2014. Adjusted R&D expenses for 2015 were$96.7 million , or 7% of total revenues, compared to$71.8 million , or 6% of total revenues, for 2014. Adjusted R&D expenses for the fourth quarter of 2015 were$26.0 million , or 8% of total revenues, compared to$21.2 million , or 6% of total revenues, for the same period in 2014. The increases were primarily due to higher costs for clinical studies and outside services for the development of JZP-110 and line extensions for the company's existing products, except that the increase in GAAP R&D expenses for full year 2015 compared to the same period in 2014 was primarily due to a$25.0 million milestone payment that was triggered by the acceptance for filing by theU.S. Food and Drug Administration (FDA ) of the first new drug application (NDA) for defibrotide. - Acquired in-process research and development expenses of
$202.6 million in 2014 primarily related to upfront and milestone payments of$127.0 million made in connection with the acquisition of rights to JZP-110 and an upfront payment of$75.0 million made in connection with the acquisition of rights to defibrotide in theAmericas . - Impairment charges of
$31.5 million in 2015 resulted from the termination of the suspended JZP-416 study. Impairment charges of$39.4 million in 2014 related to certain products we sold inMarch 2015 that we acquired as part of the EUSA acquisition.
Net interest expense in 2015 was
As of December 31, 2015, cash and cash equivalents were
During 2015, the company repurchased 0.4 million ordinary shares for
2016 Financial Guidance
Revenues |
$1,490-$1,550 million |
Total net product sales |
$1,482-$1,542 million |
-Xyrem net sales |
$1,095-$1,130 million |
-Erwinaze/Erwinase net sales |
$200-$225 million |
-Defitelio/defibrotide net sales1 |
$100-$125 million |
Adjusted gross margin %2,5 |
93% |
Adjusted SG&A expenses3,5 |
$390-$410 million |
Adjusted R&D expenses4,5 |
$115-$130 million |
GAAP net income per diluted share |
$6.76-$7.41 |
Non-GAAP adjusted net income per diluted share5 |
$10.90-$11.30 |
1. |
Guidance assumes FDA approval of the defibrotide NDA is completed on the Prescription Drug User Fee Act date of March 31, 2016. |
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2. |
Excludes $6 million of share-based compensation expense from estimated GAAP gross margin of 93%. |
|||
3. |
Excludes $87-$95 million of share-based compensation expense from estimated GAAP SG&A expenses of $477-$505 million. |
|||
4. |
Excludes $17-$19 million of share-based compensation expense from estimated GAAP R&D expenses of $132-$149 million. |
|||
5. |
See "Non-GAAP Financial Measures" below. Reconciliations of non-GAAP adjusted guidance measures are included above and in the tables accompanying this press release. |
Conference Call Details
A replay of the conference call will be available through
About
Non-GAAP Financial Measures
To supplement Jazz Pharmaceuticals' financial results and guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the company uses certain non-GAAP (also referred to as adjusted or non-GAAP adjusted) financial measures in this press release and the accompanying tables. The company believes that each of these non-GAAP financial measures is helpful in understanding its past financial performance and potential future results, particularly in light of the effect of various acquisition and divestiture transactions effected by the company. They are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP.
Investors should note that these non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with the company's results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP financial measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. In addition, from time to time in the future there may be other items that the company may exclude for purposes of its non-GAAP financial measures; and the company has ceased, and may in the future cease, to exclude items that it has historically excluded for purposes of its non-GAAP financial measures. In this regard, commencing with the company's presentation of 2015 non-GAAP financial measures, the company no longer includes an adjustment for depreciation expense in its non-GAAP adjusted financial measures. Likewise, for purposes of comparability, non-GAAP adjusted financial measures for 2014 included in this press release and accompanying tables do not include an adjustment for depreciation expense. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measures as used by Jazz Pharmaceuticals in this press release and the accompanying tables may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the company's competitors and other companies.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements, including, but not limited to, statements related to
JAZZ PHARMACEUTICALS PLC |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||
(In thousands, except per share amounts) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||
Revenues: |
|||||||||||||||
Product sales, net |
$ |
338,924 |
$ |
324,223 |
$ |
1,316,819 |
$ |
1,162,716 |
|||||||
Royalties and contract revenues |
1,957 |
3,919 |
7,984 |
10,159 |
|||||||||||
Total revenues |
340,881 |
328,142 |
1,324,803 |
1,172,875 |
|||||||||||
Operating expenses: |
|||||||||||||||
Cost of product sales (excluding amortization and impairment of intangible assets) |
24,030 |
28,808 |
102,526 |
117,418 |
|||||||||||
Selling, general and administrative |
125,555 |
105,694 |
449,119 |
406,114 |
|||||||||||
Research and development |
29,455 |
24,559 |
135,253 |
85,181 |
|||||||||||
Acquired in-process research and development |
— |
626 |
— |
202,626 |
|||||||||||
Intangible asset amortization |
23,690 |
31,977 |
98,162 |
126,584 |
|||||||||||
Impairment charges |
31,523 |
6,559 |
31,523 |
39,365 |
|||||||||||
Total operating expenses |
234,253 |
198,223 |
816,583 |
977,288 |
|||||||||||
Income from operations |
106,628 |
129,919 |
508,220 |
195,587 |
|||||||||||
Interest expense, net |
(12,210) |
(16,678) |
(56,917) |
(52,713) |
|||||||||||
Foreign currency gain |
2,091 |
2,003 |
1,445 |
8,683 |
|||||||||||
Loss on extinguishment and modification of debt |
— |
— |
(16,815) |
— |
|||||||||||
Income before income tax provision |
96,509 |
115,244 |
435,933 |
151,557 |
|||||||||||
Income tax provision |
13,748 |
33,633 |
106,399 |
94,231 |
|||||||||||
Net income |
82,761 |
81,611 |
329,534 |
57,326 |
|||||||||||
Net loss attributable to noncontrolling interests, net of tax |
— |
(1) |
(1) |
(1,061) |
|||||||||||
Net income attributable to Jazz Pharmaceuticals plc |
$ |
82,761 |
$ |
81,612 |
$ |
329,535 |
$ |
58,387 |
|||||||
Net income attributable to Jazz Pharmaceuticals plc per ordinary share: |
|||||||||||||||
Basic |
$ |
1.35 |
$ |
1.35 |
$ |
5.38 |
$ |
0.98 |
|||||||
Diluted |
$ |
1.32 |
$ |
1.30 |
$ |
5.23 |
$ |
0.93 |
|||||||
Weighted-average ordinary shares used in per share calculation - basic |
61,492 |
60,606 |
61,232 |
59,746 |
|||||||||||
Weighted-average ordinary shares used in per share calculation - diluted |
62,928 |
62,852 |
63,036 |
62,614 |
JAZZ PHARMACEUTICALS PLC |
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SUMMARY OF PRODUCT SALES, NET |
|||||||||||||||
(In thousands) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||
Xyrem |
$ |
251,752 |
$ |
222,503 |
$ |
955,187 |
$ |
778,584 |
|||||||
Erwinaze/Erwinase |
50,440 |
52,755 |
203,261 |
199,665 |
|||||||||||
Defitelio/defibrotide |
18,472 |
19,192 |
70,731 |
70,537 |
|||||||||||
Prialt |
6,496 |
9,999 |
26,440 |
26,421 |
|||||||||||
Psychiatry |
8,760 |
8,448 |
37,135 |
40,879 |
|||||||||||
Other |
3,004 |
11,326 |
24,065 |
46,630 |
|||||||||||
Total net product sales |
$ |
338,924 |
$ |
324,223 |
$ |
1,316,819 |
$ |
1,162,716 |
The following unaudited pro forma information represents net product sales for the year ended December 31, 2014 as if the company's acquisition of Gentium had been completed on
SUMMARY OF PRODUCT SALES, NET (PRO FORMA) |
|||
(In thousands) |
|||
(Unaudited) |
|||
Year Ended |
|||
Xyrem |
$ |
778,584 |
|
Erwinaze/Erwinase |
199,665 |
||
Defitelio/defibrotide |
73,434 |
||
Prialt |
26,421 |
||
Psychiatry |
40,879 |
||
Other |
47,036 |
||
Total pro forma net product sales |
$ |
1,166,019 |
JAZZ PHARMACEUTICALS PLC |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands) |
|||||||
(Unaudited) |
|||||||
December 31, |
December 31, |
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
988,785 |
$ |
684,042 |
|||
Accounts receivable, net of allowances |
209,685 |
186,371 |
|||||
Inventories |
19,451 |
30,037 |
|||||
Prepaid expenses |
20,699 |
12,800 |
|||||
Deferred tax assets, net |
— |
48,440 |
|||||
Other current assets |
19,047 |
21,322 |
|||||
Assets held for sale |
— |
32,833 |
|||||
Total current assets |
1,257,667 |
1,015,845 |
|||||
Property and equipment, net |
85,572 |
58,363 |
|||||
Intangible assets, net |
1,185,606 |
1,437,435 |
|||||
Goodwill |
657,139 |
702,713 |
|||||
Deferred tax assets, net, non-current |
122,863 |
75,494 |
|||||
Deferred financing costs |
23,268 |
33,174 |
|||||
Other non-current assets |
27,548 |
15,931 |
|||||
Total assets |
$ |
3,359,663 |
$ |
3,338,955 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
21,807 |
$ |
25,126 |
|||
Accrued liabilities |
164,070 |
164,091 |
|||||
Current portion of long-term debt |
37,587 |
9,428 |
|||||
Income taxes payable |
1,808 |
7,588 |
|||||
Deferred tax liability, net |
— |
9,430 |
|||||
Deferred revenue |
1,370 |
1,138 |
|||||
Total current liabilities |
226,642 |
216,801 |
|||||
Deferred revenue, non-current |
3,721 |
4,499 |
|||||
Long-term debt, less current portion |
1,166,916 |
1,333,000 |
|||||
Deferred tax liability, net, non-current |
294,485 |
375,054 |
|||||
Other non-current liabilities |
69,253 |
38,393 |
|||||
Total Jazz Pharmaceuticals plc shareholders' equity |
1,598,646 |
1,371,144 |
|||||
Noncontrolling interests |
— |
64 |
|||||
Total liabilities and shareholders' equity |
$ |
3,359,663 |
$ |
3,338,955 |
JAZZ PHARMACEUTICALS PLC |
|||||||||||||||
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION |
|||||||||||||||
(In thousands, except per share amounts) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
2015 |
2014 * |
2015 |
2014 * |
||||||||||||
GAAP reported net income attributable to Jazz Pharmaceuticals plc |
$ |
82,761 |
$ |
81,612 |
$ |
329,535 |
$ |
58,387 |
|||||||
Intangible asset amortization |
23,690 |
31,977 |
98,162 |
126,584 |
|||||||||||
Share-based compensation expense |
24,317 |
19,020 |
91,550 |
69,638 |
|||||||||||
Impairment charges |
31,523 |
6,559 |
31,523 |
39,365 |
|||||||||||
Upfront and milestone payments |
— |
626 |
25,000 |
202,626 |
|||||||||||
Transaction and integration related costs ** |
18,000 |
5,322 |
18,155 |
28,840 |
|||||||||||
Restructuring charges |
1,088 |
1,941 |
1,641 |
1,941 |
|||||||||||
Acquisition accounting inventory fair value step-up adjustments |
— |
— |
— |
10,477 |
|||||||||||
Non-cash interest expense |
5,390 |
6,122 |
22,738 |
13,725 |
|||||||||||
Loss on extinguishment and modification of debt |
— |
— |
16,815 |
— |
|||||||||||
Income tax adjustments |
(23,247) |
(2,127) |
(35,009) |
(29,620) |
|||||||||||
Adjustments for amount attributable to noncontrolling interests |
— |
(2) |
(2) |
(1,506) |
|||||||||||
Non-GAAP adjusted net income attributable to Jazz Pharmaceuticals plc |
$ |
163,522 |
$ |
151,050 |
$ |
600,108 |
$ |
520,457 |
|||||||
GAAP reported net income attributable to Jazz Pharmaceuticals plc per diluted share |
$ |
1.32 |
$ |
1.30 |
$ |
5.23 |
$ |
0.93 |
|||||||
Non-GAAP adjusted net income attributable to Jazz Pharmaceuticals plc per diluted share |
$ |
2.60 |
$ |
2.40 |
$ |
9.52 |
$ |
8.31 |
|||||||
Weighted-average ordinary shares used in diluted per share calculation |
62,928 |
62,852 |
63,036 |
62,614 |
* |
For purposes of comparability with its 2015 presentation, the company's non-GAAP adjusted financial measures for 2014 do not include an adjustment for depreciation expense. See "Non-GAAP Financial Measures" in the accompanying press release for additional information. |
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** |
In 2014, the adjustments were primarily related to the Gentium acquisition. In 2015, the adjustments were primarily related to a one-time charge of $18.0 million for settlement of a contract claim that was originally asserted against Azur Pharma prior to the 2012 merger between Azur Pharma and Jazz Pharmaceuticals, Inc. |
JAZZ PHARMACEUTICALS PLC |
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RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION |
|||||||||||||||||||||||
CERTAIN LINE ITEMS AND OTHER INFORMATION |
|||||||||||||||||||||||
(In thousands, except per share amounts and percentages) |
|||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||
December 31, 2015 |
December 31, 2014 |
||||||||||||||||||||||
GAAP Reported |
Adjustments |
Non-GAAP Adjusted * |
GAAP Reported |
Adjustments |
Non-GAAP Adjusted * |
||||||||||||||||||
Total revenues |
$ |
340,881 |
$ |
— |
$ |
340,881 |
$ |
328,142 |
$ |
— |
$ |
328,142 |
|||||||||||
Cost of product sales (excluding amortization and impairment of intangible assets) |
24,030 |
(1,821) |
(a) |
22,209 |
28,808 |
(671) |
(a) |
28,137 |
|||||||||||||||
Selling, general and administrative |
125,555 |
(38,146) |
(b) |
87,409 |
105,694 |
(22,217) |
(b) |
83,477 |
|||||||||||||||
Research and development |
29,455 |
(3,438) |
(c) |
26,017 |
24,559 |
(3,395) |
(c) |
21,164 |
|||||||||||||||
Acquired in-process research and development |
— |
— |
— |
626 |
(626) |
— |
|||||||||||||||||
Intangible asset amortization |
23,690 |
(23,690) |
— |
31,977 |
(31,977) |
— |
|||||||||||||||||
Impairment charges |
31,523 |
(31,523) |
— |
6,559 |
(6,559) |
— |
|||||||||||||||||
Interest expense, net |
12,210 |
(5,390) |
(d) |
6,820 |
16,678 |
(6,122) |
(d) |
10,556 |
|||||||||||||||
Foreign currency gain |
(2,091) |
— |
(2,091) |
(2,003) |
— |
(2,003) |
|||||||||||||||||
Income before income tax provision |
96,509 |
104,008 |
(e) |
200,517 |
115,244 |
71,567 |
(e) |
186,811 |
|||||||||||||||
Income tax provision |
13,748 |
23,247 |
(f) |
36,995 |
33,633 |
2,127 |
(f) |
35,760 |
|||||||||||||||
Effective tax rate (g) |
14.2 |
% |
18.4 |
% |
29.2 |
% |
19.1 |
% |
|||||||||||||||
Net income |
82,761 |
80,761 |
(h) |
163,522 |
81,611 |
69,440 |
(h) |
151,051 |
|||||||||||||||
Net income (loss) attributable to noncontrolling interests, net of tax |
— |
— |
— |
(1) |
2 |
(i) |
1 |
||||||||||||||||
Net income attributable to Jazz Pharmaceuticals plc |
$ |
82,761 |
$ |
80,761 |
$ |
163,522 |
$ |
81,612 |
$ |
69,438 |
(j) |
$ |
151,050 |
||||||||||
Net income attributable to Jazz Pharmaceuticals plc per diluted share |
$ |
1.32 |
$ |
2.60 |
$ |
1.30 |
$ |
2.40 |
JAZZ PHARMACEUTICALS PLC |
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RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION |
|||||||||||||||||||||||
CERTAIN LINE ITEMS AND OTHER INFORMATION |
|||||||||||||||||||||||
(In thousands, except per share amounts and percentages) |
|||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||
Year Ended |
|||||||||||||||||||||||
December 31, 2015 |
December 31, 2014 |
||||||||||||||||||||||
GAAP Reported |
Adjustments |
Non-GAAP Adjusted * |
GAAP Reported |
Adjustments |
Non-GAAP Adjusted * |
||||||||||||||||||
Total revenues |
$ |
1,324,803 |
$ |
— |
$ |
1,324,803 |
$ |
1,172,875 |
$ |
— |
$ |
1,172,875 |
|||||||||||
Cost of product sales (excluding amortization and impairment of intangible assets) |
102,526 |
(4,074) |
(k) |
98,452 |
117,418 |
(12,853) |
(k) |
104,565 |
|||||||||||||||
Selling, general and administrative |
449,119 |
(93,697) |
(l) |
355,422 |
406,114 |
(84,662) |
(l) |
321,452 |
|||||||||||||||
Research and development |
135,253 |
(38,575) |
(m) |
96,678 |
85,181 |
(13,381) |
(m) |
71,800 |
|||||||||||||||
Acquired in-process research and development |
— |
— |
— |
202,626 |
(202,626) |
— |
|||||||||||||||||
Intangible asset amortization |
98,162 |
(98,162) |
— |
126,584 |
(126,584) |
— |
|||||||||||||||||
Impairment charges |
31,523 |
(31,523) |
— |
39,365 |
(39,365) |
— |
|||||||||||||||||
Interest expense, net |
56,917 |
(22,738) |
(d) |
34,179 |
52,713 |
(13,725) |
(d) |
38,988 |
|||||||||||||||
Foreign currency gain |
(1,445) |
— |
(1,445) |
(8,683) |
— |
(8,683) |
|||||||||||||||||
Loss on extinguishment and modification of debt |
16,815 |
(16,815) |
— |
— |
— |
— |
|||||||||||||||||
Income before income tax provision |
435,933 |
305,584 |
(n) |
741,517 |
151,557 |
493,196 |
(n) |
644,753 |
|||||||||||||||
Income tax provision |
106,399 |
35,009 |
(f) |
141,408 |
94,231 |
29,620 |
(f) |
123,851 |
|||||||||||||||
Effective tax rate (g) |
24.4 |
% |
19.1 |
% |
62.2 |
% |
(o) |
19.2 |
% |
||||||||||||||
Net income |
329,534 |
270,575 |
(p) |
600,109 |
57,326 |
463,576 |
(p) |
520,902 |
|||||||||||||||
Net income (loss) attributable to noncontrolling interests, net of tax |
(1) |
2 |
(i) |
1 |
(1,061) |
1,506 |
(i) |
445 |
|||||||||||||||
Net income attributable to Jazz Pharmaceuticals plc |
$ |
329,535 |
$ |
270,573 |
(q) |
$ |
600,108 |
$ |
58,387 |
$ |
462,070 |
(q) |
$ |
520,457 |
|||||||||
Net income attributable to Jazz Pharmaceuticals plc per diluted share |
$ |
5.23 |
$ |
9.52 |
$ |
0.93 |
$ |
8.31 |
JAZZ PHARMACEUTICALS PLC |
|
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION |
|
CERTAIN LINE ITEMS AND OTHER INFORMATION |
|
(In thousands) |
|
(Unaudited) |
|
* |
Non-GAAP adjusted net income attributable to Jazz Pharmaceuticals plc and its line item components and related non-GAAP adjusted financial measures shown in the tables above are not meant to be considered in isolation or as a substitute for comparable GAAP reported measures, and should be read in conjunction with the condensed consolidated financial statements prepared in accordance with GAAP. The company believes that each of these non-GAAP adjusted financial measures is helpful in understanding its past financial performance and potential future results, particularly in light of the effect of various acquisition and divestiture transactions effected by the company. Company management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. Compensation of executives is based in part on the performance of the company's business based on certain of these non-GAAP financial measures. In addition, the company believes that the presentation of these non-GAAP adjusted financial measures is useful to investors because it enhances the ability of investors to compare its results from period to period and allows for greater transparency with respect to key financial metrics the company uses in making operating decisions, and also because the company's investors and analysts regularly use them to model and track the company's financial performance. Specifically, the company believes that each of these non-GAAP adjusted financial measures provides useful information to management, investors and analysts by excluding, as applicable, intangible asset amortization, share-based compensation expense, impairment charges, upfront and milestone payments, transaction and integration related costs, restructuring charges, acquisition accounting inventory fair value step-up adjustments, non-cash interest expense and loss on extinguishment and modification of debt that may not be indicative of the company's core operating results and business outlook, and by including adjustments to convert the income tax provision to the estimated amount of taxes that are payable in cash and adjustments for the amount attributable to noncontrolling interests. Investors should note that these non-GAAP adjusted financial measures are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with the company's results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP adjusted financial measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. In addition, from time to time in the future there may be other items that the company may exclude for purposes of its non-GAAP adjusted financial measures; and the company has ceased, and may in the future cease, to exclude items that it has historically excluded for purposes of its non-GAAP adjusted financial measures. In this regard, commencing with the company's presentation of 2015 non-GAAP financial measures, the company no longer includes an adjustment for depreciation expense in its non-GAAP adjusted financial measures. For purposes of comparability, non-GAAP adjusted financial measures for 2014 included herein do not include an adjustment for depreciation expense. In addition, because of the non-standardized definitions of non-GAAP adjusted financial measures, the non-GAAP adjusted financial measures appearing herein may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the company's competitors and other companies. |
Explanation of Adjustments and Certain Line Items: |
|
(a) |
Share-based compensation expense of $1,288 and $671 and restructuring charges of $533 and $0 for the three months ended December 31, 2015 and 2014, respectively. |
(b) |
Share-based compensation expense of $19,810 and $15,032, transaction and integration related costs of $18,000 and $5,244 and restructuring charges of $336 and $1,941 for the three months ended December 31, 2015 and 2014, respectively. |
(c) |
Share-based compensation expense of $3,219 and $3,317, restructuring charges of $219 and $0 and transaction and integration related costs of $0 and $78 for the three months ended December 31, 2015 and 2014, respectively. |
(d) |
Non-cash interest expense associated with debt discount and debt issuance costs for the respective three- and twelve-month periods. |
(e) |
Sum of adjustments (a) through (d) plus the adjustments for acquired in-process research and development expenses, intangible asset amortization and impairment charges, as applicable, for the respective three-month period. |
(f) |
Adjustments to convert the income tax provision to the estimated amount of taxes that are payable in cash for the respective three- and twelve-month periods. |
(g) |
Income tax provision divided by income before income tax provision for the respective three- and twelve-month periods. |
(h) |
Net of adjustments (e) and (f) for the respective three-month period. |
(i) |
Adjustments for amount attributable to noncontrolling interests for the respective three- and twelve-month periods. |
(j) |
Net of adjustments (h) and (i). |
(k) |
Share-based compensation expense of $3,541 and $2,376, restructuring charges of $533 and $0 and acquisition accounting inventory fair value step-up adjustments of $0 and $10,477 for the years ended December 31, 2015 and 2014, respectively. |
(l) |
Share-based compensation expense of $74,653 and $55,083, transaction and integration related costs of $18,155 and $27,638 and restructuring charges of $889 and $1,941 for the years ended December 31, 2015 and 2014, respectively. |
(m) |
Milestone of $25,000 and $0, share-based compensation expense of $13,356 and $12,179, restructuring charges of $219 and $0 and transaction and integration related costs of $0 and $1,202 for the years ended December 31, 2015 and 2014, respectively. |
(n) |
Sum of adjustments (k), (l), (m) and (d) plus the adjustments for acquired in-process research and development expenses, intangible asset amortization, impairment charges and loss on extinguishment and modification of debt, as applicable, for the respective twelve-month period. |
(o) |
After adjusting the income before income tax provision for the year ended December 31, 2014 by excluding a total of $202.0 million in upfront and milestone payments for rights to JZP-110 and to defibrotide in the Americas, we would have had income before income tax provision of $353,557, resulting in an effective tax rate of 26.7% for the year ended December 31, 2014 based on the income tax provision of $94,231. |
(p) |
Net of adjustments (n) and (f) for the respective twelve-month period. |
(q) |
Net of adjustments (p) and (i) for the respective twelve-month period. |
JAZZ PHARMACEUTICALS PLC |
|
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2016 NET INCOME GUIDANCE |
|
(In millions, except per share amounts) |
|
(Unaudited) |
|
GAAP net income |
$427 - $467 |
Intangible asset amortization |
100 - 110 |
Share-based compensation expense |
110 - 120 |
Non-cash interest expense |
20 - 24 |
Income tax adjustments |
7 - 15 |
Non-GAAP adjusted net income |
$688 - $712 |
GAAP net income per diluted share |
$6.76 - $7.41 |
Non-GAAP adjusted net income per diluted share |
$10.90 - $11.30 |
Weighted-average ordinary shares used in per share computations |
63 |
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SOURCE
Investors, Kathee Littrell, Vice President, Investor Relations, Jazz Pharmaceuticals plc, Ireland, + 353 1 634 7887, U.S., + 1 650 496 2717, Media, Laurie Hurley, Vice President, Corporate Affairs, Jazz Pharmaceuticals plc, Ireland, + 353 1 634 7894, U.S., + 1 650 496 2796